Piyush Patnaik, MD, Cargill’s oils business in India, talks to Financial Express Online about the ongoing consumer slowdown and how government policies can solve it.
Cargill India, a unit of the United States’ largest private company Cargill Inc, is now revamping its edible oils business strategy in India to cater to the needs of the domestic kitchen. Cargill India’s oils business has popular brands such as Gemini, NatureFresh, Leonardo Olive oil, and more. Piyush Patnaik, MD, Cargill’s oils business in India, talks to Financial Express Online about the ongoing consumer slowdown and how government policies can solve it, the FMCG industry expectations from Narendra Modi’s second term and the outlook for the industry in the coming months. He also speaks about the company’s expansion plan for its NatureFresh brand. Edited excerpts of his e-mail interview with Prachi Gupta:
Consumer slowdown is the talk of the town these days. What reforms can the government take to alleviate it and rural distress?
For the FMCG industry, the rural market is an important market as a significant number of consumers are based out of rural India. As per the latest Neilson report, the FMCG industry is likely to grow at a slower pace at 11-12 % in 2019, which is almost 2% lower than in 2018. This we can understand through the discrepancy among the consumer purchase pattern in the urban and rural market.
The rural market sales are getting affected due to the gap in income, employment rate and accessibility to the new product reforms. We expect the new government to create policies for the rural India which help in the overall growth of GDP, better employment opportunities and the approach should be more informative as rural consumers will get a chance to understand the policies and reforms, in-depth.
What is the outlook for consumer slowdown in the coming months?
For the coming months, we are very positive as we look at a steady growth for the industry. It may be a slow growth; however, it is better to have a positive growth at a slow pace, rather than fast-paced growth which is unsustainable. With the new government, we are very optimistic about their support in terms of overall investment and building greater consumers awareness across the country. I also look forward to their support towards industry players who will have new and innovative products to offer to the consumers, aimed at encouraging purchase growth. With government intervention and transparency on product approvals, more products will roll out, benefiting consumer and industry. The focus should be to ensure equilibrium between consumer necessities and industry growth.
What are FMCG industry’s expectations from Modi 2.0?
In near future, we look at trends like tier 2 and 3 cities emerging as a big market for FMCG sector, expansion in the business through e-commerce, and focus on the healthier products, to name a few. As an industry, we expect the government to support our future decisions for research and developments, category building, and new market penetration.
What are the products in the line-up for Cargill’s oils business in India?
Cargill’s oils business in India is expanding its brand portfolio by venturing into wheat derivatives like Sooji and Dalia, under brand NatureFresh. In line with our focus on expanding our offerings in the Health & Wellness segment, we have recently introduced two new oils in the edible oil category namely NatureFresh Acti Heart and Gemini Rice Bran Oil. Both the oils bring new to market value propositions of Complete Heart Health and 40% higher oryzanol content for cholesterol reduction.
We are looking to continue to fuel Indian kitchens by providing healthy and nutritional basic staples, best suited to the current consumer preferences. We intend to introduce more products across fats, carbohydrates and proteins. These will serve the needs of a typical Indian household’s kitchen.
How is Cargill revamping its India oils business?
Cargill’s oils business in India has been operating in India for more than three decades now. We understand that India is a diverse country with diverse cooking habits. Hence, we are present across India with different leading brands in different geographies such as our brand Gemini Cooking oil is the leading cooking oil brand in Maharashtra and Karnataka, NatureFresh is a popular brand in the North and eastern India and Leonardo Olive Oil is popular olive oil brand across the country.
We invest a lot in research and development, product innovation, understanding consumers’ psyche and gaining important insights. While developing a product, we focus not only on fulfilling consumers’ requirements but also their basic nutritional requirement. We are looking at expanding our offerings in the health and wellness segment, in line with the growing demand. Our synergies and strategies will be aligned to the health and wellness segment in the coming years as well.